NHAI Removes Paytm from List of Authorized Banks for FASTag Service

NHAI Removes Paytm from List of Authorized Banks for FASTag Service
NHAI Removes Paytm from List of Authorized Banks for FASTag Service

by Tanushree Jaiswal Last Updated: Feb 16, 2024 - 03:06 pm 2.5k Views
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The National Highway Authority of India (NHAI) has taken the decision to remove Paytm Payments Bank Ltd (PPBL) from its list of 30 authorized banks for providing FASTag services. This move comes as PPBL faces regulatory scrutiny over alleged rule violations. The NHAI has provided a revised list of banks authorized for FASTag services, which includes names such as Airtel Payments Bank, AU Small Finance Bank, Allahabad Bank, Axis Bank, Canara Bank, Bank of Baroda, Bank of Maharastra, Central Bank of India, City Union Bank, Cosmos Bank, Equitias Small Finance Bank and Federal Bank.

Also Fino Payments Bank, HDFC Bank, Idfc first Bank, ICICI Bank, IDBI bank, Indian bank, Induslnd bank, J&K Bank, Karur Vysya bank, Kotak Mahindra Bank, Karnataka bank, Nagpur Nagarik Sahakari bank, State Bank of India Punjab National Bank, Sarswat bank, Thrissur District Cooperative bank, Union bank of India, UCO Bank and Yes Bank.

Importance of FASTag

FASTag is like a smart sticker that uses special technology called Radio Frequency Identification (RFID) to help you pay tolls while driving. It's attached to your vehicle's windshield and lets you pay for tolls automatically from your bank account. FASTag works at more than 750 toll booths across the country, making it easy to pay tolls without stopping, which helps traffic flow smoothly and makes traveling on highways faster and more convenient.

Paytm Regulatory Issues

The Reserve Bank of India (RBI) told Paytm Payments Bank Ltd (PPBL) that they can't accept any more deposits or top-ups in customer accounts, wallets, or FASTags after 29 February. This decision came on 31 January and it means PPBL has to stop accepting these things after 29 February. RBI Governor Shaktikanta Das said there's not much chance they'll change their mind about this. He explained that RBI only takes action against banks after carefully looking into things.

Das said this during a talk with the press in New Delhi, making it clear that there's very little chance the decision will be reversed. Since 31 January when RBI imposed tough rules on Paytm Payments Bank the value of Paytm's stock has dropped by 55%. As the largest issuer of FASTags in India, Paytm Payments Bank's regulatory challenges have implications for its millions of users. With RBI's restrictions in place some customers may consider switching to alternative FASTag providers.

Final Words

NHAI's choice to take Paytm Payments Bank off their list of approved FASTag providers shows how important it is for banks to follow the rules. Even though there are other banks you can use for FASTag, this situation reminds everyone that banks need to follow the rules carefully. The way the market has reacted to this news also shows how much regulations matter for banks and keeping the market fair.

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

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